The 2010 and 2011 Financial Statements for Teresa Company Had

question 66

Essay

The 2010 and 2011 financial statements for Teresa Company had the following errors:
Teresa Company had reported net income of $90, 000 in 2010 and $95, 000 in 2011.
Required:
Prepare a schedule to determine the correct net income for 2010 and 2011.Begin the schedule with reported net income for 2010 and 2011 and work to a corrected figure.Ignore income taxes.

---

Definitions:

Consolidated Net Income

The combined net income of a parent company and its subsidiaries, after adjustments for intercompany transactions.

Noncontrolling Interest

A minority shareholding in a company where the shareholder does not have the majority of voting rights.

Acquisition-Date Fair Value

The value of an asset or liability at the time of acquisition, determined according to applicable accounting standards for fair value measurement.

Controlling Interest

Ownership of a sufficient portion of a company's stock to dictate policies and make management decisions, typically over fifty percent.